As a result of the merger, each share of Universal Bancorp common stock will be exchanged for 15.6 shares of MutualFirst common stock and $250.00 in cash.
The merger is expected to be accretive to MutualFirst's earnings per share in 2018 and with cost savings fully implemented in 2019 the accretion is projected to be approximately 13%.
The tangible book value dilution at closing of 3.1% is expected to be earned back in approximately 2.2 years using the "crossover" method. Key transaction assumptions include a gross loan credit mark of $4.4m and MutualFirst expects to realize 25% cost savings on BloomBank's non-interest expense.
MutualFirst president and CEO David W. Heeter said: "We are looking forward to the next step and the benefits that are expected from integrating the two companies.
"Merging with Universal is a very beneficial transaction that will enable us to increase the value of the franchise for the benefit of our shareholders. We will continue to pursue all strategies available to maintain and improve financial performance in order to maximize shareholder value."
Universal Bancorp president William B. McNeely said: "We are pleased to join with a partner like MutualFirst that shares our commitment to community banking. The larger size of the combined company will benefit our customers and communities with a broader array of products and services.
"We are very pleased to find a partner who we think is a mirror image of BloomBank in its commitment to community, customers and staff."
As a result of the merger, MutualFirst now has consolidated assets of $2 billion and 40 branch offices located throughout Indiana.
Keefe Bruyette &Woods served as financial advisor to MutualFirst, and Silver, Freedman, Taff & Tiernan LLP served as legal counsel. Boenning & Scattergood, Inc. served as financial advisor and rendered a fairness opinion to Universal, and SmithAmundsen served as legal counsel.
